House Health Reform Legislation Will Save Millions of Dollars
For Hospitals in Tennessee’s 8th Congressional District
Currently, hospitals in the 8th congressional district of Tennessee, a district represented by Congressman
John Tanner, do not get paid for millions of dollars worth of care they provide to the uninsured. About 16
percent of the district’s residents have no health insurance coverage today.1 That erodes hospitals’ profit
margins, making it harder for them to operate. The health reform legislation under consideration in the
House of Representatives (H.R. 3200) would change this.
Passage of H.R. 3200 means most people will be insured. It also means millions more dollars in revenue
and greater stability for hospitals.

Hospitals that serve the 8th congressional district of Tennessee and report uncompensated care listed
$147.2 million in annual uncompensated care costs in recent years.2
 This level of uncompensated care represents an average of 14.7 percent of net patient service
revenue, compared with an average of 5.8 percent for hospitals nationally.3
 The hospitals in recent years had a combined operating margin of 0.8 percent, compared with the
national aggregate total hospital margin of 6.9 percent in 2007.4 (Hospitals in this district that
have not reported uncompensated care costs are not included in these figures.)

Under the House reform bill, the Congressional Budget Office (CBO) projects that when fully
implemented the number of uninsured nationwide will fall to 16 million, 69 percent fewer than
the 51 million there would be without health reform.5 In the 8th congressional district, the
number of uninsured is projected to drop from 104,000 to 20,000.6
 The reduction in uninsured – and the corresponding increase in paying patients – will improve
significantly the financial health of hospitals, particularly those serving the greatest share of the
uninsured in the 8th congressional district of Tennessee.
 Assuming conservatively that hospitals will get paid for half of the uncompensated care they now
provide,7 hospitals in the 8th congressional district will receive $73.6 million more per year,
reducing uncompensated care to 7.4 percent of revenues from 14.7 percent today.8

Statewide in Tennessee, 50 percent of residents are covered through employer plans, 5.1 percent
through the individual market, 14.8 percent through Medicaid, 13.7 percent through Medicare and 2.3
percent through other public insurance programs, leaving 14.1 percent of residents uninsured.9
 Except for coverage of the uninsured, the distribution of insurance coverage is projected to
remain largely unchanged under H.R. 3200.10

A key component of H.R. 3200 is the creation of a public health insurance option. Although the CBO
projects only 11 million persons nationwide are likely to enroll in the new public option by 2019 (4.2
percent of the insured, nonelderly population), the public health insurance plan is key to ensuring
affordable health insurance options are available and the resulting decline in uncompensated care is
achieved.
 A number of the 8th district hospitals currently receive enhanced payment under the Medicare
program11 and may be eligible for similar payment provisions under the new public option.12
www.HealthCareForAmericaNow.org
Health Reform (H.R. 3200) Enhances Hospital Stability
In Tennessee’s 8th Congressional District
Under the health reform plan in the House of Representatives (H.R. 3200), the number of uninsured in the
8th District is projected to plunge to 20,000 from 104,000, an 81 percent decline.13 As a result, a large
portion of uncompensated care costs will be eliminated, as shown in Table 1 below. Based on the
conservative assumption that hospitals would be paid for 50 percent of current uncompensated care costs,
hospitals throughout the district would gain at least $73.6 million per year from health reform.
Table 1: Estimated Impact on Hospitals in Tennessee’s 8th Congressional District
From Reduction in Uncompensated Care Costs (Under H.R. 3200)
Conservative Estimate of 50-Percent Decline in Uncompensated Care Expenses
From Projected Reduction in Uninsured from 104,000 to 20,000
Hospital
Net Patient
Service
Revenue
Net Income
(in millions)
Uncompensated Care
(in millions)
Operating
Margin
Reduction in
Uncompensated
Costs Under
H.R. 3200
(in millions)
(in millions)
Baptist Memorial
Hospital - Huntingdon
Baptist Memorial
Hospital - Tipton County
Baptist Memorial
Hospital - Union City
Dyersburg Regional
Medical Center
$15.8
-$1.3
$1.9
-8.1%
$0.9
$30.5
$0.7
$5.4
2.2%
$2.7
$38.5
-$1.3
$3.9
-3.3%
$1.9
$67.6
$2.3
$8.7
3.4%
$4.4
$121.3
$12.0
$12.0
9.9%
$6.0
$7.0
-$0.3
$2.4
-3.8%
$1.2
$11.6
-$2.6
$2.1
-22.4%
$1.0
$56.7
$3.3
$5.5
5.8%
$2.7
$74.6
-$12.0
$8.9
-16.1%
$4.4
$9.1
$0.1
$3.2
1.2%
$1.6
$451.6
$11.8
$72.4
2.6%
$36.2
$10.9
-$3.5
$3.8
-31.9%
$1.9
$8.6
-$0.3
$2.5
-3.4%
$1.2
$68.4
-$1.3
$10.3
-1.8%
$5.1
$27.9
$0.2
$4.4
0.7%
$2.2
$1,000.1
$8.0
$147.2
0.80%
$73.6
Gateway Health System+
Gibson General Hospital
Haywood Park
Community Hospital
Henry County Medical
Center
Horizon Medical Center
Humboldt General
Hospital
Jackson-Madison County
General Hospital
McKenzie Regional
Hospital
Milan General Hospital
Regional Hospital of
Jackson
Volunteer Community
Hospital
TOTAL
Sources: Center for Medicare & Medicaid Services, Hospital Cost Reports & U.S. House Energy and Commerce
Committee District-by-District Analysis of H.R. 3200. See endnotes 2, 6, & 8 for explanations and links to sources.
Notes: Nine hospitals with an additional $83.7 million in annual revenues serve the 8th congressional district of
Tennessee but did not report figures for uncompensated care. These hospitals are not included in this table.
+This
hospital is outside the district but serves some of its residents.
www.HealthCareForAmericaNow.org
Page 2 of 3 Ver.1.1
Hospitals in the 8th District of Tennessee
Baptist Memorial Hospital –
Huntingdon
Baptist Memorial Hospital –
Lauderdale*
Baptist Memorial Hospital – Tipton
County
Baptist Memorial Hospital – Union
City
Behavioral Healthcare Centers LLC
Camden General Hospital*
Centennial Medical Center of
Ashland*+
Dyersburg Regional Medical Center
Gateway Health System+
Gibson General Hospital
Haywood Park Community Hospital
HealthSouth Cane Creek
Rehabilitation Hospital
HealthSouth Rehabilitation Hospital
– North+
Henry County Medical Center
Horizon Medical Center
Humboldt General Hospital
Jackson-Madison County General
Hospital
McKenzie Regional Hospital
Milan General Hospital
Pathways of Tennessee
Regional Hospital of Jackson
Three Rivers Hospital*
Trinity Hospital*
Volunteer Community Hospital
* Medicare Critical Access Hospital. See Endnote 11 for explanation.
+These hospitals are outside the district but serve some of its residents.
1
U.S. House Energy and Commerce Committee. Accessed at
http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1717:hr-3200-americas-affordable-healthchoices-act-of-2009-markup-district-by-district&catid=156:reports&Itemid=55.
2 Center for Medicare & Medicaid Services, “Hospital Cost Reports,” 2006-2008. Accessed at
http://www.cms.hhs.gov/CostReports/CostReportsFY/. Figures are taken for most recent year for which hospital reported in
2006, 2007, or 2008. Not all hospitals report uncompensated care costs. Only those hospitals reporting uncompensated care costs
are included in the figures provided here.
3 American Hospital Association, “Uncompensated Hospital Care Cost Fact sheet,” November 2008. Accessed at
http://www.aha.org/aha/content/2008/pdf/08-uncompensated-care.pdf.
4 American Hospital Association, "Trends Affecting Hospital and Health Systems, Appendix 4: Supplementary Data Tables 4.1 4.5" 2009. Accessed at http://www.aha.org/aha/research-and-trends/chartbook/ch4.html.
5 Congressional Budget Office, Preliminary Analysis of HR3200, July 17, 2009. Accessed at
http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf.
6 U.S. House Energy and Commerce Committee. Accessed at
http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1717:hr-3200-americas-affordable-healthchoices-act-of-2009-markup-district-by-district&catid=156:reports&Itemid=55.
7 Given the projection of an 82% decline in the number of uninsured persons, uncompensated care could decline by even more
than the amount cited here.
8 The following figures are calculated for only those hospitals within the district that report on uncompensated care. Total current
uncompensated care costs and reduction after reform would likely be much higher if all hospitals reported these data.
9 Kaiser Family Foundation, State Health Facts, “Health Insurance Coverage of the Total Population, states (2006-2007), U.S.
(2007).” Accessed at http://statehealthfacts.org/comparebar.jsp?typ=2&ind=125&cat=3&sub=39.
10
Congressional Budget Office, Preliminary Analysis of HR3200, July 17, 2009. Accessed at
http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf.
11 Under Medicare, many hospitals across the country, particularly rural hospitals, are eligible for enhanced reimbursement. For
the rural-focused initiatives, these programs have various regulations, but all are designed to ensure that rural health providers
maintain valuable services in otherwise underserved communities. Several of these programs pay at cost-based rates, rather than
fees set by the Medicare Prospective Payment System (PPS). For example, Critical Access Hospitals (CAHs) are small, isolated
hospitals that receive “cost-plus” reimbursement under Medicare. In other words, these hospitals receive Medicare payment for
101 percent of costs. See, Rural Assistance Center, “CAH Frequently Asked Questions.” Accessed at
http://www.raconline.org/info_guides/hospitals/cahfaq.php#benefits.
12 In addition, H.R. 3200 includes a provision directing the Institute of Medicine to study the adequacy of Medicare payment
rates, and the bill sets aside $8 billion for the Secretary of Health and Human Services to adjust payment rates based on the study
results.HR 3200, Sec. 1157, “Institute of Medicine study of geographic adjustment factors under Medicare,” 2009. Accessed at
http://energycommerce.house.gov/Press_111/20090714/aahca.pdf. Congressional Budget Office, “Preliminary analysis of H.R.
3200,” July 17, 2009. Accessed at http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf.
13
U.S. House Energy and Commerce Committee. Accessed at
http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1717:hr-3200-americas-affordable-healthchoices-act-of-2009-markup-district-by-district&catid=156:reports&Itemid=55.
www.HealthCareForAmericaNow.org
Page 3 of 3 Ver.1.1